The Fed's Response to the Housing Crisis of 2007 and 2008

question 32

Multiple Choice

The Fed's response to the housing crisis of 2007 and 2008 was to

• A) encourage discount window borrowing.
• B) reduce taxes on financial institutions.
• C) raise the federal funds rate.
• D) raise the reserve requirement.

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Definitions:

Feeling Happy

A state of well-being and contentment.

Conditioned Stimulus

An initially indifferent stimulus that, following its connection with an unconditioned stimulus, eventually induces a conditioned response.

Unconditional Stimulus

Regarding classical conditioning, a stimulus spontaneously and automatically produces a response, requiring no earlier learning.

Operant Stimulus

A stimulus that follows a behavior and increases or decreases the likelihood of that behavior occurring again; used in operant conditioning.